The Impact of Public Policy on Consumer Credit

The Impact of Public Policy on Consumer Credit PDF

Author: Thomas A. Durkin

Publisher: Springer Science & Business Media

Published: 2012-12-06

Total Pages: 340

ISBN-13: 1461514150

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As both the twenty-first century and the new millennium opened and the old eras passed into history, individuals and organizations throughout the world advanced their listings of the most significant people and events in their respective specialties. Possibly more important, the tum of the clock and calendar also offered these same observers a good reason to glance into the crystal ball. Presumably, the past is of greatest interest to most people when it permits better understanding of the present, and maybe even limited insight into the outlook. In keeping with the reflective mood of the time, the staff and friends of the Credit Research Center (CRC) at Georgetown University's McDonough School of Business noted that the beginning of the new millennium also marked the beginning of the second quarter-century of the Center's existence. The Center began at the Krannert Graduate School of Management at Purdue University in 1974 and moved to the McDonough School of Business at Georgetown University in 1997. The silver anniversary of its founding offered the occasion for creating more than another listing of significant past accomplishments and milestones. Rather, it offered the opportunity and, indeed, a mandate for CRC as an academic research center, to undertake a retrospective and future look into the status of research questions pertaining to consumer credit markets. For this reason, the Center organized a research conference which was held in Washington, D. C.

Consumer Credit and the American Economy

Consumer Credit and the American Economy PDF

Author: Thomas A. Durkin

Publisher:

Published: 2014

Total Pages: 737

ISBN-13: 0195169921

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Consumer Credit and the American Economy examines the economics, behavioral science, sociology, history, institutions, law, and regulation of consumer credit in the United States. After discussing the origins and various kinds of consumer credit available in today's marketplace, this book reviews at some length the long run growth of consumer credit to explore the widely held belief that somehow consumer credit has risen "too fast for too long." It then turns to demand and supply with chapters discussing neoclassical theories of demand, new behavioral economics, and evidence on production costs and why consumer credit might seem expensive compared to some other kinds of credit like government finance. This discussion includes review of the economics of risk management and funding sources, as well discussion of the economic theory of why some people might be limited in their credit search, the phenomenon of credit rationing. This examination includes review of issues of risk management through mathematical methods of borrower screening known as credit scoring and financial market sources of funding for offerings of consumer credit. The book then discusses technological change in credit granting. It examines how modern automated information systems called credit reporting agencies, or more popularly "credit bureaus," reduce the costs of information acquisition and permit greater credit availability at less cost. This discussion is followed by examination of the logical offspring of technology, the ubiquitous credit card that permits consumers access to both payments and credit services worldwide virtually instantly. After a chapter on institutions that have arisen to supply credit to individuals for whom mainstream credit is often unavailable, including "payday loans" and other small dollar sources of loans, discussion turns to legal structure and the regulation of consumer credit. There are separate chapters on the theories behind the two main thrusts of federal regulation to this point, fairness for all and financial disclosure. Following these chapters, there is another on state regulation that has long focused on marketplace access and pricing. Before a final concluding chapter, another chapter focuses on two noncredit marketplace products that are closely related to credit. The first of them, debt protection including credit insurance and other forms of credit protection, is economically a complement. The second product, consumer leasing, is a substitute for credit use in many situations, especially involving acquisition of automobiles. This chapter is followed by a full review of consumer bankruptcy, what happens in the worst of cases when consumers find themselves unable to repay their loans. Because of the importance of consumer credit in consumers' financial affairs, the intended audience includes anyone interested in these issues, not only specialists who spend much of their time focused on them. For this reason, the authors have carefully avoided academic jargon and the mathematics that is the modern language of economics. It also examines the psychological, sociological, historical, and especially legal traditions that go into fully understanding what has led to the demand for consumer credit and to what the markets and institutions that provide these products have become today.

Introduction and Overview of Consumer Credit

Introduction and Overview of Consumer Credit PDF

Author: Thomas A. Durkin

Publisher:

Published: 2014

Total Pages: 38

ISBN-13:

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The growth of the American economy in the post-War era has been characterized by a growth in the consumer economy as a fundamental driving force in the economy. In turn, this growth in the consumer economy has been driven by a growth in usage and spread of the use of consumer credit. Yet the relationship between consumer credit and the American economy remains little understood and little explored by economists.This book explores the institutions, history, and economics of consumer credit, focusing especially on the causes and consequences of the growth of consumer credit in the post-War era. Focusing primarily on consumer, non-mortgage debt, we identify the reasons for growing use of consumer credit and public policy responses to it. Starting with the basic question of “Why do consumers borrow?” we consider the evolution of consumer credit institutions and the manner in which these evolutions have co-evolved with other elements of society and the economy and the ways in which these factors have transformed American society. We also discuss contrary hypotheses, such as the long-standing research efforts to study consumer behavior from the perspective of consumer psychology (recently taking the form of so-called Behavioral Economics) and the ways in which these views have been incorporated into the study of consumer credit. Most important, as the government stumbles through efforts to respond to the most recent financial crisis, we argue that a proper understanding of how consumers actually use consumer credit and the impact on the American economy is essential for sound policy-making.We present here Chapter 1, the Introduction to Consumer Credit and the American Economy, which provides an overview of the book and frames the discussions to follow.

The Regulation of Consumer Credit

The Regulation of Consumer Credit PDF

Author: Sarah Brown

Publisher: Edward Elgar Publishing

Published: 2019

Total Pages: 256

ISBN-13: 1784712493

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This incisive book gives a comprehensive overview of the regulation of consumer credit in both the US and the UK. It covers policy, procedure and the dynamics of the consumer credit relationship to advocate for a balanced approach in achieving more effective consumer protection.

Democracy Declined

Democracy Declined PDF

Author: Mallory SoRelle

Publisher:

Published: 2016

Total Pages: 582

ISBN-13:

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Consumer credit is central to the U.S. economy, as both a driver of mass consumption and a key source of financial support for the average American. As consumer borrowing has proliferated in recent decades, so too has the prevalence of predatory lending. The growth of consumer borrowing under increasingly unsustainable conditions poses serious risks to the financial security of individuals and the American economy. Yet, policymakers have failed to enact effective consumer financial protections, and consumers have not engaged in political action to address complaints with credit. Advocacy groups have also been stymied in their efforts to mobilize consumers and to lobby regulators in support of stronger consumer financial protections. Why have these actors struggled to address problems with such an important part of the U.S. economy through political action? I propose a policy-centered answer. I argue that the U.S. has a political economy of credit in which New Deal policymakers deliberately embraced credit to fuel a consumption economy, consequently prioritizing the performance of the national economy over the protection of individual borrowers. Constrained by a scheme of their own invention, I contend that legislators are forced to prioritize widespread credit access over meaningful consumer protection, leading to the adoption of information disclosures as the primary form of credit regulation. Once enacted, the design, implementation, and administration of these policies produce regulatory feedback effects that reshape the political behavior of bureaucrats, consumer advocates, and ordinary Americans. First, credit policies privatize and personalize the use of consumer credit, diminishing citizen political engagement and complicating advocacy mobilization efforts. Second, administrative authority for credit policy is fragmented across agencies designed to promote the financial security of banks over that of individuals, leading to regulatory arbitrage that obstructs bureaucratic policymaking, public interest lobbying, and consumer participation in the regulatory arena. I employ multiple methods, leveraging archival research, legislative analyses, public opinion and complaint data, a survey experiment, and elite interviews to explore these dynamics. I conclude that these feedback effects contribute to the ongoing failure to enact meaningful consumer credit protections, ultimately threatening the financial security of borrowers and the nation as a whole.

Handbook of Consumer Finance Research

Handbook of Consumer Finance Research PDF

Author: Jing J. Xiao

Publisher: Springer Science & Business Media

Published: 2008-01-03

Total Pages: 423

ISBN-13: 0387757341

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This handbook surveys the social aspects of consumer behavior, offering latest data and original research on current consumer needs as well as identifying emerging areas of research. This accessible volume (which can be read without advanced training in the field) starts with current concepts of risk tolerance, consumer socialization, and financial well-being, and moves on to salient data on specific settings and populations such as high school students and the older consumer.

Financial Privacy, Consumer Prosperity, and the Public Good

Financial Privacy, Consumer Prosperity, and the Public Good PDF

Author: Fred H. Cate

Publisher: Rowman & Littlefield

Published: 2003-07-22

Total Pages: 71

ISBN-13: 0815796064

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A Brookings Institution Press and American Enterprise Institute publication American consumers have become accustomed to obtaining instant credit. The process requires that credit bureaus have easy access to sensitive financial information about individuals, compiled largely without their consent. This report examines the debate surrounding the role of the states in regulating these credit bureaus, especially in light of expiring amendments to the Fair Credit Reporting Act, which have allowed bureaus to continue these practices, exempting them from state laws that might obstruct them. How this controversy is resolved will have an important bearing on credit markets and financial privacy in the future. The authors make the case for continued federal preemption of the states in this area. Without it, the authors argue, the consumer credit system has developed in the United States would be put in jeopardy.

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